Dimon Will Shape Future for All Banks: Fast Pros

Tuesday, 12 Jun 2012 | 7:36 PM ET

Traders can’t help but wonder what happens in the stock market on Wednesday, when JPMorgan CEO Jamie Dimon testifies before Congress.

“It’s going to be a circus,” said Karen Finerman of Metropolitan Capital Advisors, during a discussion with fellow stock traders on CNBC's "Fast Money" the evening before the scheduled hearing. “Every politician will use every question to grandstand."

Dimon is appearing before Congress following revelations that a unit of his bank made outsize bets in the derivative markets, resulting in an unexpected loss of at least $2 billion for the company. While the bank said it can absorb the loss, the incident is serving as a "told you so" moment for those arguing for more stringent regulation of the banking industry.

“It will be a certified gong show,” added hedge fund manager Keith McCullough.

And the tone of the hearing has the pros worried.

Reacting to Dimon's First Day on the Stand
Dissecting some of the headlines from JPMorgan CEO Jamie Dimon's statements in his testimony, with the Fast Money traders; and Greg Zuckerman, WSJ, discusses whether warning flags over JPMorgan's trading loss were raised years ago.

They said if it feels as if Jamie Dimon is struggling or uncomfortable, the Street will sell first and ask questions later.

“Guys will get tapped on the shoulder – they’ll be told take exposure down,” explained Tim Seymour of EmergingMoney.com. "They’ll cash out."

The concern on the Street will be if something like this can happen to JPMorgan , it can happen to anyone.

And the impact will likely last longer than a day or two.

How Jamie Dimon is perceived by lawmakers will likely shape the Volcker Rule, they said.

“This couldn’t be worse,” added Keith McCullough of Hedgeye. “I bet this goes down as a monumental day for the industry.”

“There is a real political appetite for blood,” added trader Josh Brown. He fears Congress has an agenda. “They want this to be symbolic, they want it to look like the industry hasn’t changed.”

All the pros said watch the XLF as a tell. How it moves as Jamie Dimon testifies should inform your broader market bets.

Posted by CNBC's Lee Brodie

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Trader disclosure: On June 12, 2012 , the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Keith McCullough is long NFLX; Steve Grasso is long ASTM; Steve Grasso is long BA; Steve Grasso is long D; Steve Grasso is long FRO; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long MO; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is long VLO; Steve Grasso is long XLU; Tim Seymour is long INTC; Tim Seymour is long AAPL; Tim Seymour is long BAC; Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long JPM; Karen Finerman is long NFLX puts; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long RIMM calls; Karen Finerman is short SPY; Karen Finerman is short MDX; Josh Brown is long AAPL; Josh Brown is long GDX; Josh Brown is long GLD; Josh Brown is long XLU; Josh Brown is long JPM; Josh Brown is long WMT; Josh Brown is long TGT; Josh Brown is long COP; Scott Nations is long JPM; Scott Nations is long BAC; Scott Nations is long C; Scott Nations is long SPY

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